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The primary way I rack up miles & points are through credit cards. That’s primarily through maximizing my return on everyday spend, as well as through the lucrative sign-up bonuses offered by card issuers.
Last month I wrote a post about which credit cards I use for each bonus category. In other words, why earn 1x point per dollar when you can earn double points on dining with the Chase Sapphire Preferred® Card, American Express® Premier Rewards Gold Card, or Citi ThankYou® Premier Card. The same is true for other categories as well — airfare, hotels, gas, groceries, etc.
But what are the best credit cards for everyday spend which isn’t otherwise “bonused.” Most credit cards don’t offer bonus points for more random categories, like purchases from department stores, doctors, tax payments, etc., but many of us still spend money in those areas.
Which credit cards should you be using for those purchases, which otherwise don’t fit into one of the major bonus “categories?” Below are my top five (in order). I should note that I mostly chose cards which don’t have many strings attached. In other words, not cards which offer specific threshold bonuses, but rather ones which can be generally useful for spend, regardless of your spend profile.
With that in mind, here are my top five picks, based on my valuation of the respective points currencies:
Return on spend: ~2.7%
This is the card I’ve been using the most lately. The card accrues Membership Rewards points, which I value at 1.8 cents each. On top of that you earn:
- 3x points at U.S. supermarkets on up to $6,000 per year in purchases
- 2x points at U.S. gas stations
- 50% more points when you use your card on purchases 30 or more times in a billing period
In other words, assuming you make 30 transactions per billing cycle (which I suspect most people should be able to do, as that’s roughly one purchase per day), you’re earning 1.5 Membership Rewards points per dollar spent. At a value of 1.8 cents each, that’s a return of 2.7%.
Starwood Preferred Guest® Business Card from American Express or Starwood Preferred Guest® Credit Card from American Express
Return on spend: ~2.2%
This card has a pretty straightforward earnings structure, given that you earn 1x point per dollar spent, aside from SPG purchases, where you earn 2x points per dollar spent.
As far as I’m concerned, Starpoints are the single most valuable points currency on a per point basis, and I value them at 2.2 cents each.
That’s because they can efficiently be redeemed for hotels, and also efficiently converted into airline miles. Starpoints convert into airline miles at a 1:1 ratio in most programs, and you get a 5,000 point bonus for every 20,000 points you transfer.
In the right increments, that’s like earning 1.25 airline miles per dollar spent.
Return on spend ~2.2%
Assuming you don’t want to pay the (reasonable, in my opinion) annual fee on the Amex EveryDay® Preferred Credit Card, there’s a no annual fee version of the card, which is also quite rewarding.
- 2x points at U.S. supermarkets on up to $6,000 per year in purchases
- 20% more points when you use your card on purchases 20 or more times in a billing period
Much like the premium version of the card, you earn one Membership Rewards point per dollar spent. But if you make 20 purchases per billing cycle, you earn a 20% bonus for a total of 1.2 Membership Rewards points per dollar spent.
At a valuation of 1.8 cents per point, that’s like a return of ~2.2%. Not bad at all for a no annual fee card.
Return on spend: 2.1%
This card offers 2x miles per dollar spent. Each mile can be redeemed for one cent towards the cost of a travel purchase. That’s basically a return of 2%.
On top of that, you get a 5% refund when you redeem points, which basically means you’re achieving a return of ~2.1%.
Return on spend: 2%
I wrote about this card the other day, as I think a vast majority of consumers would be best off simplifying their credit card strategy and picking up a card like this.
The card offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases. For a no annual fee card, that’s a really great return.
Not surprisingly, my pick for credit card spend in the US is the Amex EveryDay® Preferred Credit Card. Earning 1.5 Membership Rewards points per dollar spent (assuming a minimum of 30 transactions) is a great return, and wins by a long shot, in my opinion.
Just to put the return on everyday spend into perspective, earlier this year I wrote about the cards you should consider paying your taxes with.
There are services which will let you pay your taxes for a ~1.88% fee. Being able to pick up 1.5 Membership Rewards points for a 1.88% fee is like picking up Membership Rewards points for ~1.25 cents each. That’s an absolute bargain, if you ask me.
There’s not a single right card to use, given that the value of points is subjective to begin with. It’s pretty straightforward with something like the Citi® Double Cash Card, since 2% is 2%.
On something like the Amex EveryDay® Preferred Credit Card, the valuation is ultimately based on what you value each point at, so you’ll have to crunch the numbers for yourself.
That being said, it is important to understand that the cards you should be considering for everyday, non-bonused spend might be different than the cards you should use for categories on which you can earn bonus points.
What’s your preferred credit card for everyday, non-bonused spend?